Ending the £20 Universal Credit uplift is a “callous act” which will push thousands of children into poverty, the Social Justice Secretary has said.
Shona Robison spoke as MSPs debated how to tackle poverty on Tuesday.
The Scottish Government is calling for all powers relating to employment and social security to be devolved.
However, opposition parties say the Scottish Government must do more with its existing powers.
Ms Robison said: “If we didn’t already need it, the pandemic further evidenced that the UK welfare system is not fit for purpose and risks undermining our hard won progress.
“This is the system people in Scotland must rely on and we shouldn’t have to mitigate against polices we disagree with like the £80 million we spent last year in Discretionary Housing Payments to mitigate the bedroom tax in full and support people with housing – money we could be investing in other anti-poverty measures.
“We should have those powers in our hands within this Parliament.
“The removal of the £20 uplift to Universal Credit will be a callous act which will push 60,000 families across Scotland, including 20,000 children, into poverty and will result in families unable to work receiving, on average, £1,600 less per year than they would have done a decade ago in 2011.
“That is massive, it’s a massive threat to the progress we could make here.”
The Social Justice Secretary also announced an extra £250,000 for the British Red Cross’s crisis support payments to help those most at risk of destitution.
The Government will also trial “family wellbeing budgets” in partnership with the Hunter Foundation, she said.
The Scottish Conservatives accused the Government of failing to implement all of the benefit powers it received in the 2016 Scotland Act.
The party’s social justice spokesman, Miles Briggs, said there was concern the pandemic would push more people into homelessness, saying there should be a national “housing first” programme.
He also called for more to be done on providing healthcare services to people facing homelessness, saying: “I’m disappointed that we’re seeing very little progress in provision and access of healthcare services for people who face these issues.
“All these powers lie with us in this parliament.”
Quoting a constituent, he said homeless people felt they were being treated as “second-class citizens” as they were not allowed to register at normal GP surgeries.
Mr Briggs said his party also supported doubling the devolved Scottish Child Payment benefit as soon as possible.
Scottish Labour’s social justice spokeswoman, Pam Duncan-Glancy, said: “Right now, all we’re doing with the powers we have on disability benefits is improving the administration of them, which does – I will concede – need to be improved.
“But ultimately, our ambitions must be bigger than administering it a little bit better than the Tories.
“Several years after getting the powers in this area, we are still using the rotten old DWP (Department of Work and Pensions) rulebook – it is still the people [that] the DWP say deserve the support that get it.”
Scottish Greens MSP Maggie Chapman spoke to her amendment, which called on the Scottish Government to work with Westminster and bring forward pilots for a universal basic income.
“We are here to fix the system, not patch its flaws,” Ms Chapman said.
“We are here to make hope possible and that requires us to be radical.”
Scottish Lib Dem MSP Alex Cole-Hamilton said: “This Government cannot blame the full extent of the poverty that exists in this country on a government operating from another city – not when it has been empowered for years to address that poverty but still elects not to.”